Tag Archives: Greg Franzese
It took the first iPad 28 days to sell a million units. It took the Verizon iPhone two weeks. The iPad 2 sold around one million units in a single weekend.
Reuters is reporting that some stores ran out of Apple tablets in 10 minutes. Quoting from the piece:
Wedbush Securities analyst Scott Sutherland said: “We would not be surprised to see Apple sell closer to 1 million iPad 2’s in the opening weekend.”
The article also mentions the impending tablet bubble that we blogged about recently. “The iPad 2’s early success is a warning sign of a global tablet bubble, where supply could outpace demand for tablets,” says Wall Street analyst Mark Moscowitz.
PC makers need to innovate – and quickly – if they want to compete in the tablet space.
Phandroid is reporting that the Google Android Market grew 861% last year – and calls that feat “remarkable.”
While it is true that Google Android Market moved from $11 million in revenue in 2009 to $102 million in 2010, the real story is Apple’s growth in the mobile application space. Quoting from Know Your Mobile:
It will come as no surprise to hear Apple dominates the world of apps, not just in terms of support but also in revenue. $1.7 billion dollars were generated in 2010, and the App Store now accounts for 82.7 per cent of the market.
While Apple technically lost market share in 2010, it also increased sales by a billion dollars. Apple’s dominant market position is one of the reasons the company is implementing a new subscription fee structure for applications (and angering some mobile app developers in the process).
With the fracturing of Android as a platform, not all apps are even guaranteed to run on a given phone! It’s as if the entire experience was “in beta”, only nobody’s overseeing the process.
Android will likely continue to grow in the coming year as the platform matures. But that growth must be observed in light of Apple’s strong presence in the mobile application field.
Kara Swisher is reporting at All Things D that student tablet maker Kno
is considering selling off the entire hardware part of the business and is in talks with two major consumer electronics manufacturers to do so, according to sources close to the situation.
Engadget also picked up the story, and cites competition from more established hardware manufacturers as one of the motives behind this move. Kno will reportedly focus on providing software for the iPad and Android tablets going forward.
The news only underscores the point that bringing well designed hardware to market is a difficult proposition. Some individuals think that because they have built a successful software business or popular website, they will be good at building hardware. This is a lot like assuming that if you are good at plotting data on a graph, you know exactly how a black hole works. Hardware is a complicated, complex animal. It presents many potential points of failure, and has its own unique challenges. The key to delivering great hardware is assembling an experienced team that knows how to handle everything from product concept to product launch.
Let’s imagine a web entrepreneur who starts a successful dating site (or cooking site, etc). Given the way the web works, he could easily transfer all of the lessons he learned building that site to another URL. Everything the first experience taught him about customer acquisition, internet marketing, and web design would apply to his second website (and his third and fourth, etc). If this CEO used the same transferable skills to build a number of websites he would be considered (rightly so) a savvy entrepreneur.
Now let’s look at what it takes to build a gadget, and the paradoxes that are inherent in successful hardware manufacturing. The more successful one is at building a gadget, the more money is needed to continue to be successful and the more likely the gadget business is to fail.
Wait, what? It seems counter intuitive, but with hardware, growth = problems. The moment your device becomes a success you need to accommodate more orders from the distribution channel (those are the guys that place your hardware in retail, BTW). For example, if you sold 10K units last quarter, and orders for the next quarter are 30K, you have to start building for the quarter after that. The good news is that sales are projected for 60K units. The bad news is that you need to pay for those gadgets now.
Hardware presents problems that software and websites never encounter. Bringing a hardware device to market can take 9-13 months. During that time there are significant costs and multiple points of failure that can come up (the power button won’t work, the driver is malfunctioning, the gadget loves to catch on fire, etc). As opposed to the web/software entrepreneur mentioned above, almost all of these hardware problems are unique and no amount of software success will apply in the gadget realm (you can’t pivot a defective mother board).
This post isn’t meant to pick on Kno or its leadership (by any means). And the point is not to say that startups that build hardware can’t be successful (they can). The point of this post is to point out that a great product team determines hardware’s success. They do this largely because they have done the work before and were successful. (Take us for example, we have been building award-winning devices in the CE space for years, but don’t ask Stage Two to design a main frame- that’s not our bag). Dedicated product professionals understand how complicated hardware is and have the mettle to think through every potential problem, from the quick start guide, to the distribution channel, to customer service and support. Building a new device is hard. Make sure that your product team is up to the challenge.
There are a lot of discussions in the tech world regarding the 8 – 10 Billion dollar valuation assigned to Twitter. Both Facebook and Google are purportedly in talks with the micro blogging service. The question then becomes, is Twitter really worth that much? The answer is complicated. It could be – or it could be worth next to nothing.
Both Twitter Co-Founder Biz Stone and Chief Executive Officer Dick Costolo have gone on the record to pour cold water on the Twitter acquisition rumors, as well as deflate the 10 billion dollar number.
Quoting Stone’s recent NPR interview:
“We’re not valued at $10 billion dollars. That’s just what people are writing in the newspapers, which unfortunately has the negative impact of my friends thinking I must have $10 billion dollars.”
Recently, Twitter was valued at $3.7 Billion, but the very nature of the micro-blogging service makes assigning any number to the company a difficult proposition. Twitter is like a rare baseball card, in that it has perceived worth but no inherent value. (Value here is defined as having usefulness, “utility or merit” and worth refers to the price something commands on the market). Even the rarest baseball card has little value in the real world . After all, it is only made up of cardboard, which isn’t all that valuable. The card is only worth what a buyer is willing to pay for it at a given time. To further differentiate worth from value, it helps to envision a car. A car always has value, no matter the make or model. After all, a car provides utility and serves a function. The raw materials of any car are valuable. Even when it isn’t running, an automobile’s parts can be stripped and sold.
And that is the problem with Twitter. It can’t be stripped for parts or take companies where they want to go online (to stretch the image a bit). Twitter is a platform, much like email and HTML. Each of these platforms has revolutionized the way people share information, but there is no money to be made at that level. We have yet to see someone successfully monetize a communications platform.
So how could one make money off a platform? The most viable option (and we hate it) is to close it down. We are not suggesting that Twitter create a closed ecosystem – in fact we like that they are so open (well, sort of open). They could lock down their API, and own all of the apps and services that are powered by Twitter. Of course there are risks associated with this plan, but selling user data to Google or Facebook could also backfire.
Twitter is either worth 10 billion dollars or far, far less. Ultimately Twitter is worth whatever someone is willing to pay for it. But the value of the company is questionable at this time.
Posted by Jeremy Toeman and Greg Franzese
Enabling personality types tend to minimize obvious problems, “protect people from negative consequences” and suffer from intense denial, among other psychological traits. While the urge to enable is “born out of love,” the results of this behavior are ultimately destructive. A loved one makes excuses for an addict in the family because they feel that this will help them. In reality, though, it only encourages and prolongs the negative actions.
In my mind, many tech reviews – both professional editorial content and amateur user comments – enable mediocre products by overlooking their obvious flaws. These articles give glowing impressions of consumer technologies that are clearly “not ready for prime time.” The reviewers and commenters are acting from a place of love. They think they are helping by engaging in this behavior. They may feel strongly that a certain company makes great devices and they really want other people to feel the same way. But what winds up happening is that these individuals make excuses for devices that are lacking in quality and the entire tech industry suffers as a consequence.
The quotes below are from positive product reviews. The names and quotes have been altered to protect sub-par devices:
“I’m sure it will improve over time.”
- Top Tier Blogger
“This device has a lot of potential.”
- Well Known Gadget Site
“There is a ton of potential here.”
- Tech Review
Again, these quotations are from three and four star reviews. This kind of cognitive dissonance happens all the time. Never mind that the device breaks sometimes, or that it’s missing some core functions at launch. It’s still a good purchase, say the enablers. And because we refuse to call out bad consumer tech, the manufacturers feel they can get away with shipping so-so products. As long as there is sufficient “hype,” “buzz” and “social interest,” who cares if the gadget doesn’t work that well?
This enabling happens in every sector of the lifestyle electronics industry. Take almost any product in the smart TV space, for example. Not that great. But you wouldn’t know that from all the noise. These devices have been written up – for the most part – as a good first try and well worth investing in. Android mobile up until 2.1? Same apologetic story (I can’t remember if that version is called Hot Chocolate or Snow Cone).
Every member of the CE industry needs to deliver on the promises of amazing tech. We all need to work together on this and raise our standards, not lower them. When a product doesn’t work – we should say so. If a device ships with a lot of “anticipation” but doesn’t deliver on its promises, we need to say that, too. If most products are written up as “pretty good,” it makes it harder for consumers to distinguish the truly exceptional devices in the field.
16% of Galaxy tablets are returned. Why? The enablers are partly to blame (although with those numbers there is plenty of blame to go around). The bottom line is that we all need to approach tech from the perspective of a consumer. We need to hold companies accountable for shipping bad products. Not in a nasty way, but in an honest way. When that starts to happen, I believe that the overall quality of consumer tech will improve. By encouraging people to purchase products that do not perform as they should, we tacitly encourage bad behavior from the industry as a whole. And that is the definition of enabling.
If the first image your brand conjures up is this one, it’s time to build a better brand.
Stephen Elop and Steve Ballmer recently issued an open letter outlining – in great detail – the strategic partnership between Nokia and Microsoft. However, the letter (which is really a press release signed by two CEOs) never mentions Zune once. In fact, it seems that neither company has had much to say about how the Zune brand fits in to the emerging Windows/Nokia mobile ecosystem. This has led some industry observers to conclude that the Zune “brand is on its last legs.“ Paul Therrott writes that “Zune was conspicuously missing—both in discussions from both Elop and Ballmer and on a global reach marketing slide that was created by both companies.”
My sources tell me that the Zune brand is on the way out and that all Zune products and services will be moved into other businesses, including Windows Live. Zune will essentially cease to exist under this plan.
Mary Jo Foley has more at ZDNet, including a standard “we are not killing off Zune” statement from Microsoft and this clever piece of reporting:
Some veteran Microsoft heavy-hitters are moving to the Xbox division, as I’ve blogged recently, and are seemingly working on some kind of services-focused project . . . Maybe the Zune service will end up as part of the evolving Microsoft IPTV strategy?
It seems likely that Zune will be rebranded (as Windows Live or XBOX Media) or killed off in the coming months. Some have opined that getting rid of the Zune brand would be “foolish.” However, nothing could be further from the truth.
Here’s why Microsoft should Kin the Zune.
Zune is not a great brand.
It doesn’t stand for anything and people do not have a positive emotional connection with Zune. MSN is a more desirable brand at this point, as is XBOX.
Killing Zune is cost effective.
Look at how much money it would take for Microsoft to turn Zune into a desirable, fun, meaningful brand versus how much money it would take to acquire a new media brand. Zune supporters argue that Redmond is “pot committed” to the brand, but this is not correct. Any additional investment in Zune is throwing good money after bad. It’s good branding and good business to kill Zune.
Microsoft has killed off bad ideas before.
Look no further than the Kin. Even after something has come to market, Microsoft isn’t afraid to put struggling products out of their misery.
There is no reason to doubt Microsoft’s ability to compete in this sector. They understand the need to build a Windows-based mobile ecosystem (as the Nokia deal attests to). And they know that a big part of mobile is delivering media. I trust Microsoft to ramp up a competitive iPhone/Android alternative that gives consumers easy access to movies, photos, games and music. They are capable of doing this well and in a timely manner. They just shouldn’t attempt this with the Zune brand.
Jeremy Toeman recently authored a guest post on the SimpleProductivity Blog that examines ways technology can increase productivity and reduce stress. Quoting from the article:
Managing your time effectively can greatly increase your productivity and remove unneeded anxiety in your life. There are amazing tech tools out there that will improve your productivity and save you time.
Too often people get overwhelmed or upset with the gadgets in their lives. I believe that great technology can help people live a simpler, more beneficial life.
The piece then looks at several applications that can save you time and help organize your life. From Evernote to Stage Two’s own creation NudgeMail, there are a variety of lifehacks available to you for free.
We want to thank SimpleProductivity Blog for helping us evangelize amazing tech to a new audience.
Localytics is reporting some startling numbers: in 2010, 26% of all mobile applications were used only one time. This stat shows that first impressions matter and users will quickly abandon applications that do not immediately meet their expectations. It also points to the need of looking at engagement – and not just downloads – when measuring success.
Tracking downloads is often a first step to gauging an app’s success, but download stats often provide an incomplete and inflated view. High download numbers always feel great, but if those customers never open the app or abandon it after just a few uses, those high download numbers are really part of a high churn rate.
Mobile Application developers should keep these numbers in mind as they strive to create user interfaces that are pleasing, stable and useful.
From The Hollywood Reporter:
Netflix has surpassed 20 million subscribers, capping off a growth spurt so strong that it has surprised even the company’s top management while providing more cash to satisfy the hunger for increasingly expensive streaming content.
Netflix on Wednesday posted fourth-quarter net income that increased 52% to $47 million on revenue that grew 34% to $596 million.
Their growth points to consumer demand for streaming video and the evolving nature of digital media.
We ran across this interesting Fortune article today that examines how Apple CEO Steve Jobs gets things done.
He doesn’t just develop new products; he changes games. The iPod, iPhone, and iPad, along with iTunes, have created massive disruptions, forcing players in the music and telecom industries—among others—to change their business models.
The piece is well worth a read. It examines how Jobs is able to create successful consumer tech again and again during his “second act” at Apple. While there are a number of factors at play here, the article pays particular attention to how Jobs focuses on product design and User Experience.
He views a product as an experience, not just an object. He can visualize what it will look and feel like, and can then execute it to near perfection. He makes advanced technology friendly to consumers based on his uncommon talent for connecting it to user experience. He has an innate feel for design, convenience, simplicity, and elegance in the product.
Fortune also points to his ability to manage people, make critical decisions and identify new opportunities as contributing factors to Apple’s meteoric rise in the past 12 years.
Steve Jobs didn’t invent phones, MP3 Players or Tablet PCs; he made them simple to use and desirable by focusing on how hardware and software design relate to the user experience. Steve Jobs gets things done by demanding the best from his people and building technologies that people desire.